WHY DOES THE STOCK MARKET RISE?
There are many different factors that can affect the stock market When it comes to factors that affect the rise and fall of the stock market, there are numerous. The stock market is always on the move, either up or down. They are never sitting still. But you may not be in the position to predict which stocks will move and when. To have a detailed understanding of the functioning of the stock market as a whole, it is first necessary to know the factors that affect the stock market.
It should be well known that the fact is, it is simply impossible for any one person to point the direction of the stock market. It is a subject of unconditional options, with a lot of factors. Economic, Political, Natural and Social have an important role to play instigating the sudden ups and downs that the stock market experiences.
These are the most important of all the factors that affect the stock market. Unlike the other factors that affect the stock market every once in a while, the economic factors can affect stocks and the stock market as a whole every minute! A lot of economic factors can drastically change the stock market scenario. Factors like upwards and downwards drifts in currency value are enough to instigate an urgent buying or selling of commodities. The Government’s Fiscal policies can also affect the stock market as a whole and stock prices individually. Even economic grants or sanctions have a lot of say about a country’s economy and ultimately the stock prices.
A lot of political factors also can drastically change the stock market scenario. Political factors like changes in government, сchanges in the country’s diplomatic relations with another, and even a foreign tour by a diplomat can have a profound effect on the country’s stock market. We all must keep in mind that a country’s economic goes hand in hand with its political stability.
Natural Factors often classified as ‘Acts of God’ have a definite impact on stock prices. Natural Factors such as, earthquakes, floods, or any other form of devastation usually have a adverse affect on the share prices and the stocks market. But these are mostly unavoidable as well as impossibly unpredictable.
Even social factors may have an impact on the prices of stock of any company. Factors like strikes, closures, etc all have an adverse consequence on the stock prices.
Well, the only solution is to BE CAREFUL!! A little watchfulness will save you a lot of money and more importantly, save you a lot of trouble. Try dealing in Exchange Traded Funds (ETF) An ETF is a number of stocks ( tens, hundreds, thousands) grouped together and traded as a single stock. ETFs normally pay well if vigilantly handled. Never get alarmed and sell when the stock market is dwindling, use the down period to invest more money at a cheaper price. Stock prices will surely recover over time, you should be in this for the long run anyways. You just need to have the patience to wait and observe.
The Bulls and the Bears
Bull Market: A Bull Market is one which has been showing consistent upward trend over a period of time. It shows the growing confidence that the investors are beginning to have in their stocks. Such a Bullish situation virtually guarantees a future stock price increase.
Bear Market: A Bear Market is one which has been showing a consistent downward trend over a period of time. It happens when investors are vaguely pessimistic about their stock prices and start selling their shares aggressively. At this instant, no matter what you do, by no means overlook the crucial reality that a share market is never absolutely predictable and may often act in and out of your way and not in the anticipated fashion. ALWAYS KEEP YOUR EYES OPEN!
As you’ve learned there are many different factors that affect the stock market. Anywhere from the dollar value falling to an earthquake, there is a wide array of things that can stocks to rise and fall. We just have to be prepared, and be careful with where you put your money, DON’T buy companies you have never heard of, and ALWAYS invest with money you are okay with losing. Don’t go bankrupt trying to invest!